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PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong Chapter 1 Marketing in PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong Chapter 1 Marketing in a Changing World: Creating Customer Value and Satisfaction

What is Marketing? • Process by which individuals and groups obtain what they need What is Marketing? • Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. • More simply: Marketing is the delivery of customer satisfaction at a profit.

Core Marketing Concepts Needs, wants, and demands Products and Services Core Marketing Concepts Markets Core Marketing Concepts Needs, wants, and demands Products and Services Core Marketing Concepts Markets Value, satisfaction, and quality Exchange, transactions, and relationships

What Motivates a Consumer to Take Action? • Needs - state of felt deprivation What Motivates a Consumer to Take Action? • Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i. e. I am thirsty • Wants - form that a human need takes as shaped by culture and individual personality. i. e. I want a Coca-Cola. • Demands - human wants backed by buying power. i. e. I have money to buy a Coca-Cola.

What Will Satisfy Consumer’s Needs and Wants? • Products - anything that can be What Will Satisfy Consumer’s Needs and Wants? • Products - anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want. • Examples: persons, places, organizations, activities, and ideas. • Services - activities or benefits offered for sale that are essentially intangible and don’t result in the ownership of anything. • Examples: banking, airlines, haircuts, and hotels.

How Do Consumers Choose Among Products and Services? • Customer Value - benefit that How Do Consumers Choose Among Products and Services? • Customer Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product. • Customer Satisfaction - depends on the product’s perceived performance in delivering value relative to a buyer’s expectations. Linked to Quality and Total Quality Management (TQM).

How do Consumers Obtain Products and Services? • Exchanges - act of obtaining a How do Consumers Obtain Products and Services? • Exchanges - act of obtaining a desired object from someone by offering something in return. • Transactions - trade of values between parties. Usually involves money and a response. • Relationships - building long-term relationships with consumers, distributors, dealers, and suppliers.

Who Purchases Products and Services? Market - buyers who share a particular need or Who Purchases Products and Services? Market - buyers who share a particular need or want that can be satisfied by a company’s products or services. Actual Buyers Potential Buyers

Modern Marketing System Suppliers Company (Marketer) Marketing Intermediaries End User Market Environment Competitors Modern Marketing System Suppliers Company (Marketer) Marketing Intermediaries End User Market Environment Competitors

Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Demand Management Finding and increasing demand, also changing or reducing demand Profitable Customer Relationships Attracting new customers and retaining current customers

Marketing Management Philosophies Production Concept • Consumers favor products that are available and highly Marketing Management Philosophies Production Concept • Consumers favor products that are available and highly affordable • Improve production and distribution Product Concept • Consumers favor products that offer the most quality, performance, and innovative features Selling Concept • Consumers will buy products only if the company promotes/ sells these product Marketing Concept Societal Marketing Concept • Focuses on needs/ wants of target markets & delivering satisfaction better than competitors • Focuses on needs/ wants of target markets & delivering superior value • Society’s well-being

Marketing & Sales Concepts Contrasted Starting Point Focus Factory Existing Products Means Ends Selling Marketing & Sales Concepts Contrasted Starting Point Focus Factory Existing Products Means Ends Selling and Promoting Profits through Volume The Selling Concept Market Customer Needs Integrated Marketing Profits through Satisfaction The Marketing Concept

Societal Marketing Concept Society (Human Welfare) Societal Marketing Concept Consumers (Wants) Company (Profits) Societal Marketing Concept Society (Human Welfare) Societal Marketing Concept Consumers (Wants) Company (Profits)

New Marketing Challenges New Marketing Landscape & Information Technology Ethical Concerns Nonprofit Marketing Emerging New Marketing Challenges New Marketing Landscape & Information Technology Ethical Concerns Nonprofit Marketing Emerging Challenges Changing World Economy Globalization